Taken to School

Judge dismisses a multimillion-dollar lawsuit by professors alleging class-hour fraud against Chapman University

What could have been a bellwether lawsuit in higher education fizzled on Oct. 22, when a case against Chapman University was dismissed in U.S. District Court two weeks before trial was scheduled to begin.

The multimillion-dollar suit against Chapman sought to prove the school defrauded the federal and state governments by misrepresenting classroom-attendance hours of its students.

According to Chapman attorney Fred Plevin, had the three former satellite-campus professors who brought the suit been successful, a new era would be ushered in, one in which juries are allowed to second-guess the higher-education system. Increasingly, schools use teaching methods such as independent study, online learning or experiential learning, in which classroom hours are not the main focus they were in the past, he says. Regional accrediting bodies provide quality assurance with a complex set of standards that judges and juries aren't qualified to criticize, he continued.

"This decision keeps the judge and the jury out of the accreditation process," Plevin says. "Not because they have something to hide, but because they recognize how complicated and highly technical it is."

Daniel Bartley, attorney for the former professors filing suit, vows to appeal to the U.S. Ninth Circuit Court of Appeals in San Francisco, a process he expects will take two years. The lawsuit was filed three years ago. "Chapman was obligated to live up to its word in its course schedules to teach the number of faculty hours that it promised to its students and the government," he said. "[The accrediting agencies] are not holding colleges and universities to their promises."

The former professors sued Chapman on behalf of the government, in an action known as a qui tam suit, attempting to force the school to pay back a large portion of the hundreds of millions in financial aid it received in the past decade. The professors would be allowed to keep up to 30 percent if successful (see "Litigating It Old-School," Aug. 3). According to the U.S. Justice Department, more than $2 billion was awarded in qui tam suits in the 2006-07 fiscal year.

Although the professors were from satellite campuses, most notably a campus in Monterey, the judgment would have included aid given to Chapman's main campus in Orange.

In his decision to dismiss, U.S. District Court Judge Philip Gutierrez said the professors and their attorney failed to prove that a set number of attendance hours is even mandatory under the current system governing financial-aid eligibility. To receive financial aid, colleges and universities must be accredited by one of six regional bodies nationwide—such as the Western Association of Schools and Colleges (WASC), which accredits Chapman and dozens of universities throughout California. WASC has overseen Chapman since 1962, the year WASC came into existence, and most recently renewed the university's accreditation in 2005.

Scott Jaschik, editor of the trade publication Insidehighered.com, says schools across the country have been watching this lawsuit, as well as recent qui tam suits against the University of Phoenix and Oakland City University, both for allegedly giving incentives to recruiters. The University of Phoenix has so far been unsuccessful at having its case dismissed; Oakland City University settled for $5.3 million in July.

Suing colleges has been a historically difficult task, Jaschik says. "The courts are generally reluctant to second-guess academic decision making," he says. ?"The norm is that people who sue lose these cases."

Bartley also claims Chapman and WASC colluded on how to answer questions during the discovery process (see "Who Watches the Watchdog?" Sept. 28). WASC should have investigated Chapman, he says, rather than take the school at its word that professors were teaching the right number of hours.

But according to WASC president Ralph Wolff, even if Chapman weren't teaching the prescribed number of classroom hours (45 hours per three-credit course), WASC has no actual requirements, only "guidelines." Chapman was "never in danger of losing its accreditation," Wolff says.

The plaintiffs in the case said in an earlier interview with the Weekly that letting students out early contributed to lower pass rates in certain programs. Institutions need to be held accountable for their promises, Bartley says, especially considering $80 billion per year in tax dollars is spent on higher education. Although most colleges and universities do teach the required number of hours, Bartley says, "this decision will add encouragement to those institutions that don't want to follow the law."

But, Plevin says, since there is no strict law governing class hours, schools should be able to police themselves. "Anyone who's gone to a university knows that classes get canceled and classes get let out early," Plevin says. "People can let classes out early, and it's not a violation of anything from an accreditation standpoint or a financial-aid standpoint."